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Clinton and the Bankruptcy Law

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Clinton and the Bankruptcy Law

August 8, 2007 6:27 pmAugust 8, 2007 6:27 pm

At the Democratic debate last night, Senator Hillary Rodham Clinton said that she “fought the banks” on bankruptcy overhaul. She made the statement as part of her defense for taking campaign contributions from lobbyists and special interests.

Actually, Mrs. Clinton has a mixed record on the bankruptcy bill, which wended its way through Congress over the course of several years, and on fighting the banks, which are a major constituency and major source of campaign contributions in New York.

The bankruptcy legislation was sought by banks and credit card companies, which wanted to make it harder for consumers to use the bankruptcy laws to walk away from their debts.

As first lady, Mrs. Clinton worked against the bill. She helped kill one version of it, then another version passed, which her husband vetoed. As a senator, in 2001, she voted for it, but it did not pass. When it came up again in 2005, she missed the vote because her husband was in the hospital, although she indicated she would have opposed it.

In the late 1990’s, as first lady, Mrs. Clinton became deeply involved in the issue, her first real foray into legislation since the collapse of her health-care effort in 1994. She sought a private tutorial on the subject, worked behind the scenes with members of Congress, wrote public newspaper columns and spoke out against it.

Her concern was that the bill would hurt women and children. The law then required that if a divorced man filed for bankruptcy, he had to pay off his alimony and child-support obligations first. The bill gave equal status to credit card companies and other lenders who were seeking to recoup money.

President Clinton pocket-vetoed the bill at the end of his term, after Mrs. Clinton had been elected to the Senate. Congress had left town and did not have the chance to try to override the veto.

The bill popped up again 2001, which was Mrs. Clinton’s first year in the Senate. She worked with Republicans on it and was one of 36 Democrats who helped it pass the Senate, saying it had been improved from when she opposed it. Still, this version was vigorously opposed by consumer groups and unions, and ultimately did not become law.

When the bill came up again in 2005, Mrs. Clinton missed the vote. She did vote against a procedural motion involving the bill and said that had she been present, she would have voted against the bill itself.

Explaining Senator Clinton’s support for the bill in 2001, Phil Singer, a campaign spokesman, said, “She helped forge a compromise in the 2001 bill intended to ensure that custodial parents got child custody payments.” She opposed the bill later, he said, because “unfortunately, that provision was stripped from the 2005 legislation.”

The bill was always tricky for her because it divided her party as well as two opposing constituencies in New York: banking interests and the unions. Between 2000 and 2006, commercial banking interests gave Mrs. Clinton $685,000, according to www.opensecrets.org, the Web site of the Center for Responsive Politics. That is a fraction of the tens of millions of dollars she has raised. Banks ranked 13th in the list of industries that gave her contributions. (Her top contributors, by industry, were lawyers, who gave her $6.5 million over the same period.)

For the first six months of this year, as a presidential candidate, Senator Clinton has received $493,000 from commercial banks. Senator Barack Obama of Illinois, a rival for the Democratic nomination, has received more ($607,000) and is the top recipient of contributions from banks among both Democrats and Republicans.

Mr. Obama and former Senator John Edwards of North Carolina have been hammering Senator Clinton for accepting money from “Washington lobbyists,” who have given far more to her ($413,000) than they have given to anyone else this year. At last night’s debate, she defended taking those contributions, saying she had “worked against a lot of special interests for a very long time,” adding: “I fought the drug companies and the insurance companies in ’93 and ’94. I caught — fought them again on the Medicare prescription drug benefit. I fought the banks on bankruptcy reform. So I think that my record on standing up and fighting for people really speaks for itself.”

Hillary’s double-speak is no longer a surprise. She talks out of both sides of her mouth. She could easily have authored a treatise on obfuscation. It is an art to be for two opposing propositions and to sound like both sides are winners. She is so right to perfect this technique — she ends up appealing to the ignorant on both sides of an issue. Where she stands is up to the listener to interpret because she has it both ways. It is like Kerry having been for the war before he was agin it. And the unschooled, naive fall for the charlatans time and time again. That is what is undoing the democratic way, saying you are for the little people but acting for the limousine classes.

In the beginning of the year I was pro-Hillary and then turned to Obama not necessarily because I changed my mind about Hillary but because I was won over by Obama.

But now I think I wouldn’t be supporting Hillary even if Barack hadn’t entered the race. She really bothers me. I’ve watched every debate and I can’t remember one time where she answered a question properly. Not only that, her arrogance makes me sick. If she gets a question she doesn’t like she does that “oh you must be kidding” chuckle and throws out some pandering sound-bite.

God help us if the Democrats supporting her don’t stop drinking the Hill-aid.

Thank you for this blog discussing a substantive issue. We need more substantive blogs like this. However, it is missing a few important details. I am curious to know what caused Hillary to change her position from 2001 to 2005 – did anything change in the bill itself? I applaud Hillary as the First Lady who helped kill a version that would have hurt women and children. Was the provision giving equal status to credit card companies and banks(and therefore adverse to women and children) edited out of the version she approved in 2001?

I think there should be a balance between protecting the needs of the helpless while curbing the abuses by people who spend beyond their means. And for people who believe credit card companies and banks are evil, please keep in mind that the unpaid debts of the people/companies declaring bankruptcy affect us adversely. People must be fiscally responsible and held accountable for their spending.

Leo at #1, where have you been living since the current Bush administration–No better example of obfuscation, deceit, chicanery and incompetence has manifested itself since the inauguration of the Republic!

What you call “double-speak” on the part of Senator Clinton, most fair minded voters will call pragmatism and a willingness to work with all concerned sides in order to enact meaningful legislation. Yes, under the current Bush dictatorship it is sometimes hard to remember that democracy requires making some concessions to your opponents in order to avoid gridlock. Even when her policies are flawed, Senator Clinton and John Kerry have always worked in the best interest of our nation rather than self-gain. So please save your rude and unsavory condemnation for the corrupt war profiteers who have dominated the executive branch for the past seven years.

Thanks for doing your job: actually reporting the record and not continuing this prolonged pro-Hillary/anit-Obama spin that the NY Times, CNN and some of the other main-stream media has been indulging in.

Hillary is actually lying. She boldly and courageously fought against the bill when she was not a candidate and was first lady. The bill did not change very much, and she supported it in 2001 because she was getting pressure from the banking industry to support it. She could have argued that the banking industry is a big part of her constituency in New York, and her support of the bill was her supporting her constituents. But that’s not what she did. Furthermore, I remember writing to her to not support the bill in 2005 because there were indications that she was going to vote in favor of it. She was already running for the presidency by that point, and this was another effort to look like a centrist. So she is lying when she said that she was going to vote against it in 2005. It’s sad, but true that Bill Clinton’s medical emergency gave her an out and now–true to form–she is fully exploiting it to mislead once again.

In sum, she is lying when she said that she was not going to vote for it. Her support for the bill in 2005 is specifically one of the reasons I, a New Yorker, am not supporting her. She was going to exploit her loyal supporters (lower income, lower educated) for the banking industry to score political points, money, and a centrist appearance for her presidential run.

Helen NYC: The variations were not significant. What changed is Mrs. Clinton’s position. She was not running for office, and did not support the bill during her husband’s presidency for the same reason I did not support it: it was a bill written by the banking industry, for the benefit of the banking industry, at the expence of lower income/lower educated people who are more apt to seek bankruptcy protections from unfavorable loans (such as from predatory lenders). The right and the banking industry was arguing, incorrectly but effectively, that people were running to seek bankruptcy protection in court and skirt their obligations to repay their loans. This is misleading because not everyone who seeks bankruptcy protection gets it. You have to overcome certain hurdles. Anyway, the industry re-introduced the bill, in pretty much the same shape, after Bill Clinton left office with his veto pen knowing that a more friendly Bush White House will support it. This was in 2001, when Hillary Clinton supported the bill. It didn’t make it to the White House and never got signed.

What is important here, is that the bill did not change significantly. The banking industry saw a more friendly White House and re-introduced the bill on that basis, with Mrs. Clinton’s full support. At this point she was beginning her presidential run, and was using this to creat a centrist appearance at the expense of the poor who needs bankruptcy protection. Afterall, how can you be a crazy, left wing communist if you are supportive of big banking industry–the ultimate support of capitalism over communism?!

I suppose short of reading the two bills, we’ll never know for sure the exact differences between them. The Clinton supporters will assume she was on the right side of both, and others will assume or at least suspect she was taking the politically expedient path. Shrug.

Well, after googling for a couple minutes, and looking through the first few, seemingly non-partisan links that came up, it seems Rodney is closer to right than not. Here’s one, but if any Clinton supporters have other links with different info, I’m willing to look.

She makes so many excuses for not being a leader for the people. I’m an Independent voter and she does not have my vote. If she is the candidate for the Dems I can not not vote for her as my president. I hope to finaly vote for a candidate in stead of against one. Push forward Senator Obama.

Please see SEC. 212 of the Bankruptcy Reform Act of 2001: PRIORITIES FOR CLAIMS FOR DOMESTIC SUPPORT OBLIGATIONS. This provision gave alimony and child custody priority over other liens and claims. So what troubled Hillary as the First Lady (lack of protection for women and children) was resolved by giving them priority in the 2001 Act. This explains why she had a change of heart. By the way, if you look at the voting record, the 2001 Act passed by a vast majority – Republicans and Democrats alike. Again, I’m not sure why it’s such a bad thing to ask people to be fiscally responsible so that they won’t declare bankruptcy and adversely affect others and the future generation. And I think we would all be better served by scrutinizing legislations and conversing intelligently about candidates’ positions before accusing them of lying.

NYT like other major corporate media outlets have been doing HRC’s bidding for tyhe longest of time. They have used every chance they got to distort Obama’s message, smear him whenever they can and, even as they pretend to give him some coverage, they always remember to stick in the knife for their ‘girl’. You better get used to it, HRC will not be coronated simply be cause of a name. She is an empty skirt. Americans are going for substance, hope and clean leadership. They want real change, not back to the scandalous 1990s. But why would at NYT are, she passes on to you part of the loot she gets from lobbyists. C’mmon, be professional journalists for a change.

I think one of the key points here is Hillary “missed” the vote in 2005. She also didn’t bother to read the Patriot Act, intelligence on prewar Iraq, and the war authorization bill. She was elected Senator to do a job which she doesn’t seem willing to do. And to be fair to her, not many congressmen/women do. All they seem interested in is stumping the minute they’re elected for money to run again. How can we expect Hillary to be a decisive leader who will be of any benefit to the people of the US as well as the rest of the world with this sort of track record?

What is new in the lying of Queen Bee, Hillary with the support of the so called LIBERAL MEDIA. All the voters wants is honest and Objective debate on the issues. Mr. Obama says what he believes. Ms. Queen bee believes we the people owe her.
DEmocrats wake up and choose someone who is honest and we can trust. I for one do not want to lose the general. I beleive that if Clinton is the candidate, the DEMS will lose. I for one will never vote for her.

Well, I’m amazed! Someone in the media is actually doing some research and realizing how Hillary changes her mind with the wind (or the polls, or the lobbyists…). Perhaps someone will also remember how she said, years into the war, that we should ‘stay the course'(…oh yes…used this administration’s own rallying cry) in Iraq.

Hillary Clinton is looking out for Hillary Clinton, and the media have taken to pushing her candidacy pretty blatently. They are doing as fine a job of swiftboating her opponents as they did with Gore in 2000 and Kerry in 2004 — hopefully the American people realize what we ended up with when they fell for it.

I appreciate the coverage and the thoughtful commentary regarding the bankruptcy bill. I’m president of a non-profit consumer organization, based in Sacramento, that fought against it, along with other consumer groups, labor unions, women’s groups, academics (Google Elizabeth Warren at Harvard), and bankruptcy attorneys.

The harsh reality is that the leading causes of bankruptcy are illness (often combined with losing medical insurance), divorce, and job loss. With rare exceptions, we’re not talking about people who were irresponsible, but about our neighbors and co-workers who were a little less lucky then we are.

It’s true that as First Lady Senator Clinton mastered the details of the complex legislation, realized the harm it would inflict on families–especially single parents who rely on child support–and urged President Clinton to veto it. To her credit, and his, he killed it, via a pocket veto.

Then the big banks, auto dealers, and credit card companies poured vast sums into electing Bush and a profoundly anti-consumer Congress. They clearly felt they had to deliver for their backers.

Some Democrats with exceptional backbone stood up to the special interests. Senators Durbin, Kennedy, and Feingold stand out for opposing the bill and pleading with their colleagues to at least adopt provisions to protect victims of fraud and other guiltless, vulnerable people. Other Democratic senators failed us miserably. Senator Biden (D-Delaware), home of major credit card companies, was one of its most enthusiastic backers.

As a Senator, Hillary Clinton worked behind the scenes and while she played a role in softening the blow, in the end her efforts made it easier for the big banks and auto dealers to shift the risks of reckless lending onto vulnerable workers and families. On the final vote, she failed to vote at all.

Senator Obama voted NO.

Passage of the law helped set the stage for the mortgage meltdown that is rocking the nation. Recently, Senator Dodd (Chair of the Senate Banking Committee) characterized the bankruptcy law as one of the worst laws ever passed by Congress.

Ironically, some of the special interests who pushed the hardest for passage are now also paying the price. It’s a no-brainer that in a nation where 2/3 of the economy is driven by consumer spending, failing to protect consumers from the excesses of corporate greed eventually erodes public confidence in the marketplace. With dire consequences.

Seems obvious, especially in retrospect, but when lawmakers are blinded by political influence/pressure from lobbyists, it’s amazing how much they can overlook.